CRri  iL538. 


7d 


-(») 


#f?/ 


Duke  University  Libraries 

Report  of  the  m 
Conf  Pam  #487 

DTTD7DS1EX 


r 


REPORT 


OF  THE 


MAJORITY  OF   THE  fOMiMITTEE 


ON 


STATE    ENDORSEMENT 


OP  THE 


cojvfederjite  debt. 


BOUGHTON,  NISBET  &.  BARNES,  State  Priktem 

(MILLIDOEVILLE,     GA. 


1863. 


iiS 


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S  U  u> 


[Ordered  200  copies  for  House  and  100  for  Senatt. 


The  Special  Committee  to  which  was  referred  so  much 
of  the  Message  of  his  Excellency  the  Governor,  with  the 
accompanying  documents,  as  relates  to  "State  endorsement 
of  the  Confederate  debt,"  have  had  the  same  under  consid- 
eration, and  a  majority  of  the  committee  make  the  follow- 
ing 

REPORT. 

Tlie  currency  of  the  Confederate  States  consists  almost 
exclusively  of  notes  issued  by  the  Confederate  Govern- 
ment, and  is  rapidly  depreciating  from  excessive  issue. — 
It  is  liable  to  depreciation  of  another  kind,  and  from  anoth- 
er cause,  which  is  perhaps  more  pernicious  than  the  other. 
The  fact  cannot  be  concealed  that  there  is  a  distrust  of  the 
ability  of  the  Confederate  Government  to  redeem  the  notes, 
which  have  been  and  may  be  issued. 

The  depreciation  arising  from  excessive  issue  contributes 
to  the  depreciation  of  the  other  kind  to  which  allusion 
has  been  made.  The  remedy  for  the  first  is  to  reduce  the 
circulation,  but  that  alone  will  be  no  remedy  for  the  other. 
If  the  amount  of  notes  in  circulation  should  be  reduced 
by  being  funded  in  interest  bearing  bonds,  so  that  the  cir- 
culation shall  approximate  tli*^  amount  required  by  the  bus- 
iness of  the  country,  the  depreciation  from  a  distrust  of 
the  solvency  of  the  Government  will  not  be  removed  ;  for 
funding  the  notes  will  merely  change  the  form  of  the  in- 
debtedness, but  will  not  reduce  its  amount,  nor  make  its 
payment  more  certain  and  secure ;  on  the  contrary  it  will 
be  increased  to  the  extent  of  the  interest  which  the  bonds 
will  bear.  Though  funding  the  notes  may,  to  some  extent, 
remedy  the  depreciation  from  excessive  issue,  it  will  not 
prevent  the  other  depreciation  alluded  to,  and  which  is  the 
most  hurtful  of  the  two.  There  may  be  a  redundancy  in 
bonds,  as  well  as  in  notes,  for  capitalists  will  be  as  unwilling 
to  hold  the  bonds  as  they  are  the  notes,  when  they  distrust 
the  ability  of  the  government  to  meet  its  liabilities.  Be- 
ing thrown  upon  the  market  in  hrge  amounts  from  an  ap- 
prehension of  their  ultimate  failure,  depreciatioQ  must  ne- 
cessarily ensue, 


4 

To  remove  depreciation  from  excessive  issue,  funding  of 
the  notes  is  recommended.  That  may  prove  an  effectual 
remedy  for  the  first  evil  complained  of  in  the  currency, 
but  it  is  only  one  step  towards  sustaining  the  credit  of  the 
notes.  Something  more  is  necessary  or  that  step  will  be 
unavailing. 

It  has  been  suggested  that  to  make  them  a  legal  tender 
in  payment  of  debts  would  have  the  efiect  to  sustain  their 
credit,  but  that  would  neither  reduce  the  volume  of  cir- 
culation, nor  remove  the  apprehension  of  the  ability  of  the 
Government  to  redeem  its  notes.  They  are  promises  to 
pay  money,  and  to  make  them  a  legiil  tender  would  not 
change  the  contract,  or  release  the  Government  from  its 
obligation  to  redeem  them  when  they'fall  due;  if  it  veould, 
the  eflc-ct  would  be  practical  repudiation. 

Taxation  is  also  recommended  as  a  remedy  for  the  evil 
complained  of.  Taxatioti  is  necessary  and  should  be  re- 
storted  to,  but  that  alone  will  not  accomplish  the  object. 
It  would  simply  reduce  the  circulation,  for  the  time  being, 
the  amount  of  the  taxes  paid,  and  no  more ;  but  in  time  of 
war,  and  when,  as  in  the  case  of  our  Government,  the  ex- 
penses are  met  almost  exclusively  by  the  issue  of  Treasu- 
ry notes,  the  annual  tax,  which  may  be  levied,  will  be  in- 
sufficient for  the  wants  of  the  Government,  and  therefore 
ineffectual  to  reduce  the  amount  of  notes  in  circulation 
to  the  usual  and  proper  level  of  the  currency.  Taxation 
is  necessary,  and  in  conjunction  with  other  measures,  will 
have  a  beneficial  effect.  But  the  great;  necessity  which  is 
upon  us,  is  to  give  credit  to  the  Governtnent  issues;  and 
to  sustain  it,  something  is  necessary  besides  retiring  the 
circulation,  and  changing  the  form  of  the  indebtedness. — 
What  is  wanting  is  confidence;  an  abiding  confidence  that 
the  notes  and  principal  and  interest  of  the  bonds  will  be 
paid. 

How  is  this  confidence  to  be  inspired?  In  the  first  place, 
by  a  strict  observance  of  good  faith  ;  by  avoiding  repudia- 
tion, and  everything  leading  to  it. 

Secondly,  by  providing  the  means,  as  far  as  practicable, 
for  the  payment  of  the  interest  of  the  public  debt,  and  a 
fund  for  its  ultimate  redemption.  Such  a  fund  should  be 
accumulated  gradually,  and  applied  in  extinguishnVent  of 
the  debt,  as  its  accumulation  may  justify.  And  to  remove 
the  danger  which  now  threatens  the  public  credit,  .and  to 
insure  confidence,  in  the  third  place,  the  States  of  the  Con- 
federacy should  come  to  the  aid  of  the  Government,  and 
support  its  credit  by  endorsement  of  its  bonds. 

Credit  is  the  main,  and  ind^i'A  the  sole,  dependence  of 
our  (iovernroeot  fgr  the  means  of  defence  in  the  w?ir  with 


5 

the  United  States.  Under  present  circumstances,  no  reve- 
nue can  be  raised  from  duties  on  importations,  or  if  any, 
it  will  be  inconsiderable  in  amount.  Taxation  cannot 
raise  the  means  rendered  necessary  by  the  war  in  which 
we  are  engaEred. 

Wars  are  expensive.  The  most  wealthy  nations  are  com- 
pelled to  resort  to  loans  and  extraordinary  means  to  raise 
•money  in  time  of  war.  The  ordinary  revenues  of  no  coun- 
try in  such  a  time  are  sutticient  for  its  wants. 

Our  Confederate  Government,  just  struggling  into  exis- 
tence, cannot  be  expected  to  be  exempt  from  the  lot  com- 
mon to  all  nations.  Credit  is  the  chief  reliance  of  all,  of 
the  wealthiest  as  well  as  the  poorest,  nations,  to  meet  the 
expenses  necessarily  incurred  by  war. 

The  only  resource  of  our  Goveriiment  in  the  present 
emergency  consists  in  the  issue  of  notes  promising  to  pay 
money.  The  necessities  of  our  country  re(|uire  the  daily, 
and  constant  issue  of  such  notes.  It  is  a  duty  due  to  the 
people,  who  are  the  holders  of  these  notes,  to  protect  them 
against  depreciation.  Patriotism  demands  that  their  credit 
be  sustained.  If  that  be  destroyed  our  means  of  defence 
will  be  gone,  and  submission  to  an  odious  despotism,  or 
subjugation  by  it.  will  be  the  inevitable  result.  These  notes  ' 
con.^titute  thd  debt  incurred  by  the  Government  in  defence 
of  the  people  of  the  Confederate  States,  and  the  people  of 
the  States  must  pay  the  debt. 

Loans  of  money  cannot  be  obtained  with  which  to  pros- 
ecute our  defence.  Our  Confederate  Government  is  yet  un- 
recognized by  Foreign  Governments,  and  it  cannot  be  ex- 
pected that  foreign  capitalists  will  loan  money  to  a  Gov- 
ernment,  whose  independence  and  existence  among  the  na- 
tions of  the  world  have  not  been  established.  Loans  can- 
not be  obtained  from  our  own  people,  for  the  reason  that 
they  have  but  little  active  capital,  and  nothing  like  an 
amount  fiufficient  for  the  purposes  ©f  government  in  tin)e 
of  war. 

Necessity  then  compels  the  issue  of  notes  promising  to 
pay  money,  and  in  large  amounts.  We  are  tngaged  in  a 
war  of  gigantic  proportions,  and  our  necessities  and  expen- 
ditures correspond  with  the  magnitude  of  the  war.  Why 
should  not  the  States  guarantee  the  payment  of  the  debt 
thus  incurred  in  their  behalf? 

The  States  by  their  secession  from  the  United  States  in- 
duced the  war,  which  is  now  upon  us — it  is  a  war  in  de- 
fense of  the  right  of  secession — and  the  right  of  the  States 
to  hold  their  property  in  peace  and  security.  Who  must 
and  will  bear  the  expenses  of  this  war,  but  the  people  of 
the  State  ?  The  means  must  come  from  their  pockets, 
whether  the  debt  be  paid  by  tjie  States,  or  the  Confederate 


Government,  and  whether  the  money  for  the  payment  of  the 
jjublic  debt  be  raised  by  taxation,  or  by  duties  on  importa- 
tions, the  people  are  and  will  be  the  payers  in  both  cases. 
If  direct  taxation  should  be  resorted  to  by  the  Confederate 
Government,  there  will  be  no  property  subject  to  taxation, 
bnt  that  owned  and  possessed  by  the  people  of  the  States. 
The  Confederate  Government  has  no  ooniniunity,  no  people, 
but  the  people  of  the  States.  Neither  territorially,  nor  as  a 
body  politic,  is  there  any  such  nation  or  people,  as  the  Con- 
fiederate  nation.  There  are  Confederate  States,  or  States 
confederated,  and  the  people  of  each  is  a  distinct,  seperate, 
sovereign  community. 

The  Confederate  Government  is  the  agent  of  these  Con- 
federate States,  and  is  as  much  their  government,  as  are 
their  respective  State  governments.  The  government  of 
the  Confederate  States  is  the  government  of  the  people  of 
Georgia  to  the  extent  of  the  powers  granted,  as  well  as 
their  own  State  government.  Both  are  the  agents  of  the 
sovereign  people  of  the  State  for  specified  purposes,  and 
her  people  are  as  much  bound  to  maintain  one  in  the  legit- 
imate exercise  of  the  powers  granted,  as  the  other.  There 
is  an  obligation  upon  them  to  support  both.  They  are  bound 
to  support  their  State  government,  and  are  just  as  much 
bound  to  contribute  their  share  to  the  support  of  the  other. 

Now  if  the  Confederate  Government  has  incurred,  and  is 
incurring  a  heavy  debt,  as  the  agent  of  Georgia,  and  her  co- 
States,  and  in  their  defense,  why  should  not  each  bear  her 
proportionate  share  of  that  debt 't  What  satisfactory  ob- 
jection can  be  urged  against  it?  Will  it  be  said  that  the 
debt  was  incurred  by  the  Confederate  Government,  and 
therefore  that  government  should  pay  it  ?  The  answer  is, 
the  Confederate  Goverument  inctirred  it  for  the  benefit  of 
the  people  of  the  St  ites,  and  as  their  agent,  and  the  means 
of  payment,  if  it  shall  ever  be  paid,  must  come  from  them. 
ThL*y  can  come  from  no  where  else.  AVhy  not  then  let  the 
States  indorse  the  debt,  which  their  people  must  ultimately 
pay  ?  It  may  be  said  that  this  is  tantamount  to  a  man's  in- 
dorsing his  ovrn  note.  The  cases  are  not  strictly  analogous. 
It  wouldhe  more  proper  and  correct  to  say,  that  it  would 
be  the  principal  recognizing  and  indorsing  the  act  of  his 
agent.  In  such  a  case  the  validity  of  the  act  of  the  agent 
would  be  placed  beyond  dispute.  So  in  the  case  under  con- 
sideration. Let  the  States  indorse  the  payment  of  the  Con- 
federate debt,  it  will  be  equivolent  to  an  indorsement  of  the 
acts  of  their  agent,  and  assuming  a  liability  which  their 
agent  incurred  in  their  behalf,  and  for  their  benefit. 

And  the  great  controlling  reason  is  that  the  effect  of  such 
indorsement  will  be  tp  strengthen  the  credit  of  the  Couf^jd- 


erate  bonds  and  notes,  but  without  their  credit  may  suffer 
material  injury,  and  with  its  loss,  if  that  should  unfortu- 
nately occur,  we  lose  everything  valuable  in  this  life — cred- 
it, property,  liberty,  independence — all  will  be  buried  in 
one  common  grave.  When  this  credit  is  gone,  with  it  will 
go  our  means  of  defense — when  we  lose  our  means  of  de- 
tiense,  subjugation,  or  submission  will  follow.  To  avert  so 
dire  a  calamity,  every  eflbrt,  and  all  means  should  be  used 
to  sustain  the  credit  of  the  Confederate  Government. 

To  this  end,  and  for  this  purpose,  we  think  the  measures 
indicated  in  the  following  resolutions  indispensably  necessa- 

1.  Resolved  by  ihe  General  Assembly  of  t/tr  Sfate  oj  Georgia^ 
That  it  is  expedient  for  the  purpose  of  sustaining  the  cred- 
it of  the  Confederate  Government,  that  the  several  States 
of  the  Confederacy  should  guarantee  the  payment  of  such 
bonds  as  may  be  issued  by  the  Government  of  the  Confed- 
erate States  for  funding  the  Treasury  notes  now  in  circu- 
lation, and  hereafter  to  be  issued,  each  State  guaranteeing 
her  respective  proportionate  share  of  the  amount  of  bonds 
80  issued,  according  to  her  representation  in  the  Confeder- 
ate Congress,  omitting  in  the  calculation  the  States  of  Ken- 
tucky and  Missouri. 

2.  Rsolved,  That  in  the  opinion  ©f  this  General  Assem- 
bly, it  is  the  duty  of  the  Confederate  Congress  to  raise  by 
taxation  annually  an  amount  sullicient  to  pay  the  interest 
on  the  bonds  issued  by  the  Confederate  Government,  as  it 
falls  due,  and  to  create  a  sinking  fund  upon  such  plan  as 
may  be  adopted  by  Congress  lor  the  gradual  and  ultimate 
extinguishment  of  the  public  debt. 

The  Committee  also  report  by  bill. 

All  which  is  respectfully  submitted, 

E.  G.  CABANISS, 
GEO.  S.  BLACK, 
J.  A.  S.  LEE, 
L.  N.  WHITTLE, 
MII^TGN  A.   CANDLER, 
B.  B.  MOORE, 
GEO.  T.  BARNES, 
From  the  Committee  of  the  House. 

D.  A.  VASON, 
From  the  Committee  of  the  Senate. 


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